The heart goes out to the Camerons

It's a sad morning in Westminster with the news that Samantha & David Cameron's son Ivan passed away in the night.

It must have been difficult for them on learning that their son had cerebral palsy, but it was obvious that they doted on their son and took pride in him.

Our thoughts are with Samantha and David through this difficult time.

Squiffy.

For anyone following the Derek Draper/blogosphere spat

This is brilliant.



Squiffy.

What is Frank Field doing on the Labour benches?

Every article that Frank Field pens shows that he's sitting on the wrong benches in the House Of Commons. Take this one from today's Independent. It could have been written by David Cameron or George Osborne and backs up what they are saying. Go on Frank, dare you.


Squiffy.

Why does it always rain?

Apologies for not blogging recently, but on returning from a weekend in Manchester I found my flat had been burgled. Apart from the general rubbish feelings that this brings, it also creates a lot of hassle in your life.

For me, I can cope with the loss of personal property as I was expecting to be burgled at some point - such is life, especially in these harder times. My partner is more distraught at the thought of someone trawling through the underwear drawer and making such a mess. No, my problem is the hassle it creates as you have to face up to a time dealing with officialdom, with strange procedure which make no sense and the constant phone calls.

So far, though, dealing with the Police has been ok, apparently our case was closed within 48 hours as there was no evidence other than a footprint on the toilet cistern. Rather disheartening, I know, to have only 2 days as an active crime! Being called at work by victim support was a surprise, and as I ran into a meeting I didn't have time but to ponder the fact that I'm now a victim with my own social group.

Sending details of the stolen items to the home insurance company was slightly annoying as after faxing the details through, there was no acknowledgment of receipt. A quick phone call eased my mind, but why couldn't I have been informed before having to pick up the phone? We'll see what happens when the claim is processed.

The aforementioned rain is from the Travis song, Why does it always rain on me? A sense of self-pity, brought on by the 'it never rains, but pours' sentiment. Apart from the burglary, my bank card has stopped working and I lost my Oyster card. It's all happened in the last few days, so while waiting for a new bank card I've had to use other ways to finance my luxurious life!

Sorting out a new Oyster card was fun, after reporing it lost I got a new one. Great, I thought, I can transfer my old tickets over to the new card. But had I filled in the form? Had I given it a password? No, the man in the tube office hadn't offered one up when I'd explained my situation. No matter that I'd had to go to the next tube station along, as the one I usually used was closed all weekend for engineering works. I popped into another station for the form, to find a man in the kiosk sat behind a sign saying 'Information Only. For tickets use the machine'. I think he may have been able to have read out the headlines to the News Of The World, as reading that seemed to be his job, but for handing out a form from the drawer next to his right hand - that's just too much.

Anyway, I've got my Oyster card now. And a new laptop, although that didn't have my name on the packaging - checking with work's post room made sure that I got it, means that I should be able to resume my blogging.

Hopefully the rain will move away now.


Squiffy.

What will Gordon Brown's legacy be?

It may seem premature to be asking such a question, but let's look forward to July 2010 when, according to the opinion polls, we'll be governed by David Cameron's Tories.

It all depends on what happens to the economy over the next year. If Gordon Brown and Alistair Darling are right in their predictions then we'll have had one year of a recovery and they will be classed as brilliant minds who managed to pull Britain out of a deep recession or maybe even a depression. Gordon Brown will be a Chancellor par excellence. Also, if they are right then they will probably deserve to win the next election and we will be thinking that history has been cruel to them.

My own opinion differs somewhat from the above! Already, the economy seems to be much worse than the pre-budget report set out. If we do start growing in the third quarter of this year, I'll go out and buy a lovely hat, bake it and have it with some HP sauce. I think the economy will get worse during this year and maybe, just maybe, at the bottom of the cycle by year's end. This means that a recovery may be under way come the election, but the price will have been many billions of pounds seemingly squandered which made not one iota of difference to the recession. The public will be angry looking at the increased taxes which will be heading their way like a heat seeking missile.

Given my view, as it is, I think Gordon Brown will be seen in a similar light to Herbert Hoover. He took over in a boom and left in a recession. The previous years were all ruled by Republicans who did not spot the inflating bubble. Gordon Brown's tenure as Chancellor will be shaped by this view too. He mentioned the housing bubble in 2005 and did nothing to deflate it. People who still say that he was a good Chancellor will have differing views come 2015.

What of his other achievements as PM? It's pretty hard to think of them. He promised change, and we got change - a recession - but I'm not sure that was the intention. He was going to get rid of spin and sleeze, well I don't think that's been achieved. The announcment of reductions in British troops during the Tory Party Conference in 2007 put paid to spin, and now the big spinners are back in GB's tent. Sleeze is back with a vengeance now that four Labour peers have been accused of taking cash for changes to legislation.

What else? A big new housebuilding scheme - very unlikely given the economic circumstances. Eco-towns, struck down by Nimbyism. Great Britain day - disappeared. NHS constitution, ok I'll give him that - but until it makes a difference to the care people receive we'll have to wait and see.

I think that history will see him as a bad Chancellor and a desperately bad PM, characterised by high taxes, shocking waste, dithering, a complete lack of empathy, arrogance and bad temper.

Squiffy.

No More Inflationary Tory Boom and Bust

The Prime Minister was on the today programme this morning being interview by Evan Davies. At one point Evan asked him about the now legendary phrase of 'no return to boom and bust', and the PM couldn't - just couldn't - bring himself to say that it had been a mistake to utter those words.

When he said the words some voters may have been convinced, and went out on a spending borrowing splurge leading now to a greater boom and greater bust. So apart from being a factual mistake now that we're in 'bust' - he may have actually influenced behaviour to make it more likely.

It's funny that when we all realised we were heading for a recession Gordon Brown then started inserting the word Tory into the phrase - 'no more Tory boom and bust'. As if that means anything to the people who are now having their pay cut and are losing their jobs. Incidentally, it would be impossible for Gordon Brown to bring about a tory boom and bust as he was a Labour Chancellor. So that was some weird kind of thinking.

This morning he's changed the phrase again to 'no more inflationary boom and bust'. Oh well, that's ok then. It's so much better to be in a credit crunch, possibly deflationary boom and bust than an inflationary boom and bust. I don't think so. At least with an inflationary boom and bust we know which levers to pull. Gordon Brown is like the signal man in the 'The Great St Trinians Train Robbery', randomly pulling the levers without knowing which way the next train is going, when it's coming back and which way it's facing. He's mistaking activity with effectiveness.

One last point, yesterday Adair Turner - the new chair of the FSA - stated that new rules for banks would ensure that they increased capital in the good years to cope with less income in the bad years. Maybe he should apply that to Governments too and tell the PM, then maybe we wouldn't be looking at £1 trillion debt over the next few years.

Over and out.

Squiffy.

Ron Dennis to head the FIA?

Ron Dennis has announced that he is stepping down from the team principal role within McLaren. Last year while Max Mosley was embroiled in his 'strapped for cash' he said that he would not seek re-election as FIA president but I think he will do a U-turn and stand again. He likes the power.

I've just had a cheeky thought. Maybe Ron Dennis should stand for FIA president, probably against Max. The two men loathe each other, and after 2007's McLaren punishment it would be sweet justice for Ron to oust Max.

Sometimes dreams do come true.

Squiffy.

The Euro is a matter of foreign policy

I've just caught up with today's Daily Politics. Denis MacShane seemed to be affronted that it was William Hague who made a statement about the Tory party position on joining the Euro rather than George Osborne.

I don't see the problem. Membership of the Euro is a matter of economics and foreign policy, they are intertwined. Proponents of joining the Euro don't seem to think that ceding part of your economic policy affects sovereignty. I think it does.

Let's see how the Pigs do (Portugal, Ireland, Greece & Spain) coping with the recession within the constraints of the Euro.

Now back to Most Haunted Live.

Squiffy

KC/DC?

Most of the speculation around Westminster and the right of centre blogs revolves about the forthcoming Shadow Cabinet reshuffle. So I thought I'd add my own thoughts.

It's unusual for a Shadow Cabinet reshuffle to be so anticipated, usually they pass with only a small amount of comment. Of course this time the speculation has been mounting on the Ken Clarke Question? Should David Cameron bring Ken Clarke back?

The Tory right are fuming at the prospect of bringing this Europhile back into a front bench position, but should they be wary of Ken Clarke? In the Euro wars which inflicted so much damage on the Tory party, the right won. The Tories now oppose nearly every integrationist treaty and Euro membership. If Maastrict had happened now, the Tories would oppose. The Europhile wing of the party is vastly reduced in number and has virtually no sway on the party.

So should the right fear setting the cats amongst the apple cart by bringing back Ken Clarke? I don't think so. Unlike the Major Government when Europhiles and Europhobes were pretty much in equal number and tearing the party apart on a daily basis, the issue is resolved. It would be up to Ken to tow the party line, and any attempts to tie DC's hands over a Euro issue would be resolved with KC's exit. Ken Clarke would know this from the outset.

So what benefits could be gained? He was a fine Chancellor who did leave the present Government a golden legacy, he speaks with authority and he's a man of the people and not a part of the Notting Hill set. It has been a tragedy that this man has not been on the front line, and he is partly to blame for not wanting to put the hours in tackling the Government on a daily basis. But his presence, in the Business brief would soup up the Tory attack now, and they need it...

In one way, Gordon Brown bringing back Peter Mandelson was a sign that the Labour party could be reconciled after the TB-GBs. Bringing back Ken Clarke would be a sign that the Tories are back as a fully fighting force after the Euro wars.

So bring it on.

On a similar note, who else should be brought back and who should be let go. It's a shame David Davis did his foolish (but honourable) resignation last year, because he should be the next Home Secretary but I can't see DC giving him another chance this side of an election. I'd bring back Patrick Mercer too as he speaks with authority on defence. I think it's time for Caroline Spelman to go back to the back benches for a while, and so too Peter Ainsworth, he's just been too invisible. I wouldn't get rid of Alan Duncan, he's also got the common touch when explaining the Government's mess.

Anyway, my tuppence.

Squiffy.

Politicians in disguise

The world has gone mad. Gordon Brown has said that he thinks Optimus Prime from the transformers would solve most of our problems. The Tories have countered saying that Brown's got more in common with Decepticon. Is this the level of our political discourse? Maybe it's time for a new cartoon, Optimus Prime Mentalist vs DeceptiCam.

Squiffy.

Let's learn to save

Yesterday's announcement by David Cameron that the Tories are to propose abolishing basic rate tax on the interest earned on savings has got to be welcomed. Many people throughout the land have saved their money so that they can enjoy a good retirement living off the interest. And while the young 'uns, like myself, welcome lower Interest rates so that our mortgages are cheaper, it can decimate a pensioner's income. Reducing the tax on interest won't solve the problem, but it can certainly help.

There is also the moral case that someone shouldn't be taxed on earnings and then taxed again if they choose to save it rather than spend it. It will inevitably get taxed when it gets spent anyway, though VAT. This Government inherited a household savings ratio of nearly 10% of income in 1997, which is now down to just below 2%, showing just how much our savings culture has all but vanished. With figures also showing that household debt has ballooned is it any wonder why we're in a credit crunch built recession?

We need to learn to save again and rid ourselves of debt, saving to spend rather than borrowing to spend needs to be the new mantra. Let's each do our bit, I'm now going to put the money saved from the reduced mortgage interest payments into paying the mortgage off sooner. The Government needs to do likewise and reduce spending on extraneous projects (not NHS and Schools, but ID cards and expensive IT projects) and reduce its borrowing.

Only then will we have learnt the lessons of this credit crunch induced recession.

Squiffy.

No time to join the Euro

In yesterday's and today's papers there are two articles about whether we should join the Euro. In yesterday's Times Oliver Kamm states that we should join now. In today's Mail Peter Oborne says that the Euro will not see another 10 years and that we should not join.

Oliver Kamm believes that the first ten years of the Euro have been a success and it is now challenging the Dollar as the world's reserve currency.

Peter Oborne believes that the stresses of the recession will lead to break-up of the Euro Zone and the death of the Euro.

I think it is useful to separate the Euro as a currency from EMU (Economic and Monetary Union) to align these two views.

I think that after a shaky start the Euro has indeed proved to be a successful currency. That's as it should be, representing 16 nations, now that Slovakia has joined, and 300 million people it should be successful. Many people who wish us to join the Euro believe that it should be easier to travel without changing from one currency to another, and that without the cost of changing money from one currency to another the costs to business can be reduced. For this reason the Euro looks attractive.

EMU is the overarching principle for which the Euro was created. One single market, one currency and one central bank to align the economies of Europe. Thus far, though, EMU has only had to contend with relatively benign economic conditions.

The next few years will determine whether EMU and the Euro have a long term future. There are four main levers that Governments use to affect their economy; Interest Rates, Exchanges Rates, Tax Rates and spending. EMU has removed control over Interest Rates and influence on exchange rates and so Euro Land Governments only have control over their spending and tax levels. If the Euro Zone countries cannot effectively manage their tax and spending in these difficult times strains will be placed on EMU and the central bank. The central bank has to cope with the demands from 16 different countries and may not be able to help as much as necessary. Stresses may become amplified in such circumstances (such as those that affected Britain's exit from the ERM).

Countries which were closely aligned when EMU was launched should cope well, those that fudged their budgets and entry criteria to become members of the club may find themselves diverging from the economies of the Euro Zone and finding it ever more difficult.

If EMU survives with all 16 members still operating the Euro at the end of the recession, then it will have passed the test and may become the world's reserve currency (although I think the Chinese Yuan is more likely to supplant the Dollar) . Otherwise Peter Oborne will be proved right.

Until the recession is over and we're well into recovery it is too early to say which is right. For now, I prefer to have all four economic levers at our disposal even if our Government are not using them correctly!

Squiffy.

10 predictions for 2009

Here's some predictions for 2009, let see if I can do better than 4 points for 2008!

1. There will be no general election in 2009. Although Gordon Brown will have been lining up a May/June election for seven months, the polls won't look good enough to risk it, and so GB will go until the last moment in 2010.
2. The recession will last throughout 2009.
3. Several other high street names will experience problems. I'm guessing at HMV, W.H.Smiths, and Robert Dyas. I just hope I'm wrong.
4. Interest rates will reduce to 0.5%, the CPI will also go down to 0.5%, and the RPI will briefly go negative.
5. Robert Kubica will win the F1 World Championship.
6. A bad set of economic figures in the beginning of the year will signal a reversal to Labour's recovery, the polls will go back to a good Tory position of Con 45%, Lab 26%, LD 17% by year's end.
7. Ken Clarke will come back as shadow Business secretary.
8. David Blunkett will come back as Home Secretary.
9. The Tories will win the Local/Euro elections on a percentage share of 43%. Labour will get 22% with the LibDems at 26%.
10. Peter Mandelson will be forced to resign over some business dealings as EU Comissioner.

Squiffy.

Let's mark last year's predictions

In January I made some predictions for 2008. Let's see how I got on...

1. Gordon Brown's government will continue to unravel slowly. By the end of the year, the polls will look like Labour 28%, Lib Dems 18%, Tories 45%.
If I'd taken the snapshot in August this would have been true, the bank bail out seemed to reverse the position - though I don't think for too much longer. 1/2 point

2. The economy will slow, but avoid a recession. GDP for 2008 will be 1.5%.
Wrong. We're in recession. 0 points.

3. Interest rates will end the year on 4.5%, CPI 1.9%, RPI 3.9 %.
Wrong. Interest rates are 2%, CPI 4.1%, RPI 3.0%. 0 points.

4. Several ministers will resign, stating irreconcilable differences of opinion with the PM.
Wrong. Somehow, they all stuck in there. 0 points.

5. Charles Clarke, Alan Milburn and Stephen Byers will all pipe up asking for a real revolution in New Labour and stating that GB is not the change the country needs.
Right. They did ask for this through the beginning of the year. 1 point.

6. Nick Clegg will move the Lib Dems to the right whilst being put under pressure from his party for moving too far.
Half right, he did move the party to the right. 1/2 point.

7. Funding scandals will claim a scalp on the Labour and Conservative front benches. Probably Peter Hain, but not George Osborne.
Right. This was not the Yachtgate affair but I got this one right. 1 point.

8. Barack Obama will face John McCain and beat him to become President-Elect by the end of the year.
Spot on. When everyone though Hilary would win, and John McCain was out of it. 1 point.

9. Ken Livingstone narrowly beats Boris Johnson for Mayor of London.
Wrong, but who'd have thunk it? 0 points.

10. Kimi Raikkonen wins the F1 championship by 10 points from Lewis Hamilton. Felipe Massa comes third, Fernando Alonso fourth, Heikki Kovalainen fifth and Nick Heidfeld sixth.
Wrong. Kimi was with the fairies and Lewis claimed it in spectacular fashion. I'm glad I was wrong. 0 points.

Overall, 4 points. Not too bad but I think the events of September skewed quite a few outcomes. Tomorrow for the 2009 predictions!.

Squiffy.

Could we be in store for a May/June General Election?

Many commentators are wondering if there will be an early election, possibly in February 2009. I don't think that will happen, the history of elections in cold February point to the ruling party losing out. It could be advantageous to Labour though as it's likely that the recession will get worse before it gets better, and as it gets worse the polls could swing against Labour's recovery.

I think the timing of the withdrawal of troops from Iraq may be pointing to a May or June election. Normally you wouldn't play politics with the armed services, but Gordon Brown has form - remember his visit to Iraq to announce the return of 1000 troups during the Tory Party conference of 2007?

I think Gordon Brown will want to ride the wave of gratitude to the troops on their return and put the whole error of the Iraq war behind him. After their return the pressure will be on for a full inquiry into the lead up to the war and its conduct. If he delays an election to 2010, the outcome of any inquiry could be very embarrassing at the very moment when he goes to the country.

Also, the month of May has often seen General Elections, as the season of Spring brings forward feelings of optimism. The elections of 1997 and 2005 were in May and the 2001 election probably would have be had it not been for Foot and Mouth creating a delay.

Of course there are European Elections in June, so Gordon Brown may want to combine all the elections into one and create less spending/hassle for the councils. Saving money isn't really in GB's nature though so he may still go for May.

Squiffy.

How low can you go?

That's a question for Sterling. For the last six days the Pound has dropped to increasingly record lows against the Euro. It has now plunged by 30% in the last few months, even the drop when the currency was withdrawn from the ERM was not as great.

The worry is that the low value of sterling will create the need for higher interest rates than would be good for times in a recession. But why is the pound plunging? Because our economy is in a terrible state, and the markets know it! The huge levels of debt is creating a lack of confidence, where others such as Germany have until recently been running a surplus.

I'm afraid that the pound will continue to drop whilst the Government fanny about with small measures and extra borrowing. They need to solve the credit crunch before tinkering at the edges of VAT, the Tories' Loan Guarantee Scheme would be one such solution. Unfortunately the Government seem determined to land the future tax payers with a level of debt greater than those from World War 2. We're doomed Mr Mainwaring.

Squiffy.

There EU go again

Not very surprising, I know, but the decision by the Irish Taoiseach, Brian Cowen, to hold a second referendum on the Lisbon Constitutional treaty just typifies why the EU doesn't do democracy. The Irish people voted against the ratification of the Lisbon treaty by a margin of 54% to 46%, but are now going to be asked to think again. I bet there wouldn't be a second referendum had they voted in favour!

It's been happening for a while now, when the EU doesn't get a result it wants from a referendum the result is simply ignored (as in the case in France over the Lisbon treaty who then ratified it) or the question is put again. The Yes camp invariably says that there was a lot of scare mongering about proposals and, true, sometimes some of the predicted horrors are some way from the truth. But both sides are culpable, the British weren't exactly told the truth about our own referendum in 1975 (when I was two years old!), little did we know that we would be put on a course of political union rather than the free tree block most thought we would be joining.

Luckily for the Irish, they at least can express a view. We have been denied ours from the Government's election manifesto. Regardless of the merits and pitfalls of the Lisbon treaty, I urge the people of Ireland to vote the treaty down to demonstrate to the faceless bureaucrats that democracy matters and ignoring the wishes of the people cannot be treated lightly.

Come forth EU democracy.

Squiffy.

It's bloody awful

The key message from today's Pre-Budget report. The amount of borrowing is truly astronomical leading to a total of £1 trillion debt.

Ok, so the answer to my previous question was that the Government doesn't care about strict rules on keeping budget details under wraps. The only major figure not leaked was the 0.5% increase in National Insurance Contributions. A tax paid by employees and employers just as they will (hopefully) be leading the country out of recession.

I'm highly sceptical that the VAT reduction will work and I also think the economy will go down before it rises again - so the timing may be all wrong for a stimulus.

Just like the last three budgets (including PBR's), I think this budget will quickly unravel. The NIC and 45% tax is a timebomb waiting to go off as the Government heads to the left.

I think this may be a game changer, but probably not in the Governments direction.

Squiffy.

PBR Leaks

The leaking of the cut in VAT and proposed increase in high rate tax to 45% for those earning more than £150,000 have been widely leaked. The fact that they have been picked up by most newspapers and broadcast media suggests that the leaks have come from the Government. But why?

It years gone by, this would be nearly a criminal act, but in recent years small details have been leaked to the press. It is wrong and the city takes a very dim view on it. This time big measures have been leaked - either the Government doesn't care about previous procedures, is completely incompetent with details or is trying to wrong foot George Osborne.

I wouldn't be surprised if the VAT cut is not announced and another measure takes its place. This would be almost unheard of, but they really want to knock George Osborne off his feet as his prepared response has to be ditched!

Which reason will be revealed in the next hour.

Squiffy.

VAT to 15%

If the papers are to be believed, we are in for a cut of VAT to 15% in tomorrow's Pre-Budget report.

I'm not an economist, but I don't think it is going to work. Firstly, making items slightly cheaper isn't going to make everybody to rush out and buy goods when the economy looks dreadful. I also think that the drop in prices would have a bigger effect on inflation than desired.

If you're going to have fiscal stimulus package you need to put a large amount of money, a windfall, in people's hands. Some people would save the money, but a lot of people would go out and spend it.

Gordon Brown last week mentioned that the bigger threat to the economy now is deflation rather than inflation. Wouldn't the cut in VAT compound this possible problem?

What happens if none of this works? Another stimulus package, more borrowing and lots more tax later.

Squiffy.